26 U.S.C. § 6335

Sale of seized property

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(a) Notice of seizure

As soon as practicable after seizure of property, notice in writing shall be given by the Secretary to the owner of the property (or, in the case of personal property, the possessor thereof), or shall be left at his usual place of abode or business if he has such within the internal revenue district where the seizure is made. If the owner cannot be readily located, or has no dwelling or place of business within such district, the notice may be mailed to his last known address. Such notice shall specify the sum demanded and shall contain, in the case of personal property, an account of the property seized and, in the case of real property, a description with reasonable certainty of the property seized.

(b) Notice of sale

The Secretary shall as soon as practicable after the seizure of the property give notice to the owner, in the manner prescribed in subsection (a), and shall cause a notification to be published in some newspaper published or generally circulated within the county wherein such seizure is made, or if there be no newspaper published or generally circulated in such county, shall post such notice at the post office nearest the place where the seizure is made, and in not less than two other public places. Such notice shall specify the property to be sold, and the time, place, manner, and conditions of the sale thereof. Whenever levy is made without regard to the 10-day period provided in section 6331(a), public notice of sale of the property seized shall not be made within such 10-day period unless section 6336 (relating to sale of perishable goods) is applicable.

If any property liable to levy is not divisible, so as to enable the Secretary by sale of a part thereof to raise the whole amount of the tax and expenses, the whole of such property shall be sold.

(d) Time and place of sale

The time of sale shall not be less than 10 days nor more than 40 days from the time of giving public notice under subsection (b). The place of sale shall be within the county in which the property is seized, except by special order of the Secretary.

(e) Manner and conditions of sale(1) In general(A) Determinations relating to minimum priceBefore the sale of property seized by levy, the Secretary shall determine—(i) a minimum price below which such property shall not be sold (taking into account the expense of making the levy and conducting the sale), and(ii) whether, on the basis of criteria prescribed by the Secretary, the purchase of such property by the United States at such minimum price would be in the best interest of the United States.(B) Sale to highest bidder at or above minimum price

If, at the sale, one or more persons offer to purchase such property for not less than the amount of the minimum price, the property shall be declared sold to the highest bidder.

If no person offers the amount of the minimum price for such property at the sale and the Secretary has determined that the purchase of such property by the United States would be in the best interest of the United States, the property shall be declared to be sold to the United States at such minimum price.

(D) Release to owner in other cases

If, at the sale, the property is not declared sold under subparagraph (B) or (C), the property shall be released to the owner thereof and the expense of the levy and sale shall be added to the amount of tax for the collection of which the levy was made. Any property released under this subparagraph shall remain subject to any lien imposed by subchapter C.

(2) Additional rules applicable to saleThe Secretary shall by regulations prescribe the manner and other conditions of the sale of property seized by levy. If one or more alternative methods or conditions are permitted by regulations, the Secretary shall select the alternatives applicable to the sale. Such regulations shall provide:(A) That the sale shall not be conducted in any manner other than—(i) by public auction, or(ii) by public sale under sealed bids.(B) In the case of the seizure of several items of property, whether such items shall be offered separately, in groups, or in the aggregate; and whether such property shall be offered both separately (or in groups) and in the aggregate, and sold under whichever method produces the highest aggregate amount.(C) Whether the announcement of the minimum price determined by the Secretary may be delayed until the receipt of the highest bid.(D) Whether payment in full shall be required at the time of acceptance of a bid, or whether a part of such payment may be deferred for such period (not to exceed 1 month) as may be determined by the Secretary to be appropriate.(E) The extent to which methods (including advertising) in addition to those prescribed in subsection (b) may be used in giving notice of the sale.(F) Under what circumstances the Secretary may adjourn the sale from time to time (but such adjournments shall not be for a period to exceed in all 1 month).(3) Payment of amount bid

If payment in full is required at the time of acceptance of a bid and is not then and there paid, the Secretary shall forthwith proceed to again sell the property in the manner provided in this subsection. If the conditions of the sale permit part of the payment to be deferred, and if such part is not paid within the prescribed period, suit may be instituted against the purchaser for the purchase price or such part thereof as has not been paid, together with interest at the rate of 6 percent per annum from the date of the sale; or, in the discretion of the Secretary, the sale may be declared by the Secretary to be null and void for failure to make full payment of the purchase price and the property may again be advertised and sold as provided in subsections (b) and (c) and this subsection. In the event of such readvertisement and sale any new purchaser shall receive such property or rights to property, free and clear of any claim or right of the former defaulting purchaser, of any nature whatsoever, and the amount paid upon the bid price by such defaulting purchaser shall be forfeited.

(4) Cross reference

For provision providing for civil damages for violation of paragraph (1)(A)(i), see section 7433.

(f) Right to request sale of seized property within 60 days

The owner of any property seized by levy may request that the Secretary sell such property within 60 days after such request (or within such longer period as may be specified by the owner). The Secretary shall comply with such request unless the Secretary determines (and notifies the owner within such period) that such compliance would not be in the best interests of the United States.

(g) Stay of sale of seized property pending Tax Court decision

For restrictions on sale of seized property pending Tax Court decision, see section 6863(b)(3).

(Aug. 16, 1954, ch. 736, 68A Stat. 785; Pub. L. 89–719, title I, § 104(d), Nov. 2, 1966, 80 Stat. 1137; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 99–514, title XV, § 1570(a), Oct. 22, 1986, 100 Stat. 2764; Pub. L. 100–647, title VI, § 6236(g), Nov. 10, 1988, 102 Stat. 3740; Pub. L. 105–206, title III, § 3441(a), (b), July 22, 1998, 112 Stat. 761.)Editorial NotesAmendments

1998—Subsec. (e)(1)(A)(i). Pub. L. 105–206, § 3441(a), substituted “a minimum price below which such property shall not be sold” for “a minimum price for which such property shall be sold”.

Subsec. (e)(4). Pub. L. 105–206, § 3441(b), added par. (4).

1988—Subsecs. (f), (g). Pub. L. 100–647 added subsec. (f) and redesignated former subsec. (f) as (g).

1986—Subsec. (e)(1). Pub. L. 99–514 amended par. (1) generally. Prior to amendment, par. (1) “Minimum price” read as follows: “Before the sale the Secretary shall determine a minimum price for which the property shall be sold, and if no person offers for such property at the sale the amount of the minimum price, the property shall be declared to be purchased at such price for the United States; otherwise the property shall be declared to be sold to the highest bidder. In determining the minimum price, the Secretary shall take into account the expense of making the levy and sale.”

1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.

1966—Subsec. (b). Pub. L. 89–719 inserted an alternative to the publication of notice of sale to allow publication in a newspaper generally circulated within the county in which the property is seized even though the newspaper is not published in such county.

Statutory Notes and Related SubsidiariesEffective Date of 1998 Amendment

Pub. L. 105–206, title III, § 3441(c), July 22, 1998, 112 Stat. 761, provided that: “The amendments made by this section [amending this section] shall apply to sales made after the date of the enactment of this Act [July 22, 1998].”

Effective Date of 1988 Amendment

Amendment by Pub. L. 100–647 applicable to requests made on or after Jan. 1, 1989, see section 6236(h)(2) of Pub. L. 100–647, set out as a note under section 6331 of this title.

Effective Date of 1986 Amendment

Pub. L. 99–514, title XV, § 1570(b), Oct. 22, 1986, 100 Stat. 2765, provided that: “The amendment made by subsection (a) [amending this section] shall apply to—“(1) property seized after the date of the enactment of this Act [Oct. 22, 1986], and“(2) property seized on or before such date which is held by the United States on such date.”

Effective Date of 1966 Amendment

Amendment by Pub. L. 89–719 applicable after Nov. 2, 1966, regardless of when title or lien of United States arose or when lien or interest of another person was acquired, with certain exceptions, see section 114(a)–(c) of Pub. L. 89–719, set out as a note under section 6323 of this title.

Uniform Asset Disposal Mechanism

Pub. L. 105–206, title III, § 3443, July 22, 1998, 112 Stat. 762, provided that: “Not later than the date which is 2 years after the date of the enactment of this Act [July 22, 1998], the Secretary of the Treasury or the Secretary’s delegate shall implement a uniform asset disposal mechanism for sales under section 6335 of the Internal Revenue Code of 1986. The mechanism should be designed to remove any participation in such sales by revenue officers of the Internal Revenue Service and should consider the use of outsourcing.”

Notes of Decisions

Cited in 213 cases (6 in the last 5 years), 1962–2022 · leading case: Mikulski v. Centerior Energy Corp., 501 F.3d 555 (6th Cir. 2007).

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Mikulski v. Centerior Energy Corp., 501 F.3d 555 (6th Cir. 2007). · cites it 4× “2363 , the plaintiff filed a state law claim to quiet title, alleging that the defendant's record title was invalid because the IRS, in seizing the plaintiff's property to satisfy a federal tax deficiency, had failed to give the plaintiff proper notice pursuant to 26 U.S.C. §…”

Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005). · cites it 2× “Title 26 U. S. C. § 6335 required the IRS to give notice of the seizure, and there is no dispute that Grable received actual notice by certified mail before the IRS sold the property to respondent Darue Engineering & Manufacturing.”

Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (2006). · cites it 2× “The governing statute, 26 U. S. C. § 6335 (a), provides that "notice in writing shall be given .”

Hollar v. Myers (In Re Hollar), 184 B.R. 243 (Bankr. M.D.N.C. 1995). · cites it 12× “§ 6334 (e); (d) failing to serve notice personally as required by 26 U.S.C. § 6335 (a); (e) failing to fully and properly describe the property to be seized in the Notice of Seizure as required by 26 U.”

Jones v. Flowers, 547 U.S. 220 (2006). · cites it 2× “See also 26 U. S. C. § 6335 (a) (requiring the Internal Revenue Service to make a reasonable attempt to personally serve notice on a delinquent taxpayer before relying upon notice by certified mail); 28 U.”

Norman E. Anderson the Zeitgeist Co. v. United States, 44 F.3d 795 (9th Cir. 1995). · cites it 12× “KLEINFELD, Circuit Judge: The Internal Revenue Service (“IRS”), in an internal manual, has created a means of delaying the sale of seized property beyond what the statute, 26 U.S.C. § 6335 , and associated regulations allow.”

United States v. Whiting Pools, Inc., 462 U.S. 198 (1983). · cites it 2× “4 Section 6335, as amended, of the 1954 Code, 26 U. S. C. § 6335 , provides for the sale of seized property after notice.”

Betty Verba v. Ohio Cas. Ins. Co., & the United States of Am., 851 F.2d 811 (6th Cir. 1988). · cites it 7× “Betty Verba filed an action against the Ohio Casualty Insurance Company and the United States of America seeking —A declaratory judgment sustaining the constitutionality of 26 U.S.C. §§ 6335 (b), and 6339(c), and —A determination that Ohio Casualty’s judgment lien, held on…”

Brown v. Evanston Bank (In Re Brown), 126 B.R. 767 (N.D. Ill. 1991). · cites it 8× “For such assets, the IRS procedures for notice of seizure and notice of sale ( 26 U.S.C. § 6335 (a) and (b), respectively) perform the essential function of safeguarding these *771 post-levy property interests.”

Orville R. Goodwin v. United States of Am. Calvin E. Esselstrom Joseph Phillips, 935 F.2d 1061 (9th Cir. 1991). · cites it 6× “Goodwin contends that the seizure and sale should be set aside because the government did not literally comply with the notice requirements of 26 U.S.C. § 6335 . He also contends that the district court erred by ruling that the statute of limitations had *1063 not expired prior…”

Zapara v. Comm'r, 652 F.3d 1042 (9th Cir. 2011). · cites it 5× “§ 6330 to review the Internal Revenue Service’s failure to comply with its statutory mandate under 26 U.S.C. § 6335 (f). We conclude that it did, and we affirm the judgment of the Tax Court.”

Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 377 F.3d 592 (6th Cir. 2004). · cites it 4× “The IRS served notice of the seizure by certified mail, although 26 U.S.C. § 6335 (a), the relevant statute, provides that notice must be “given” personally to the owner of the property.”

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— 26 U.S.C. § 6335(a) — 1 case

Van Skiver v. United States, 751 F. Supp. 1522 (D. Kan. 1990).

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